A subsidiary of mainboard-listed Kingboard Chemical has announced plans to acquire a hydropower plant in Yingde city, Guangdong province, for 700 million yuan (about HK$656 million).
The proposed acquisition is seen as a step in the laminate manufacturer's strategy of moving production further inland to cut costs.
Chairman Paul Cheung Kwok-wing yesterday said Singapore-listed subsidiary Kingboard Copper Foil Holdings, 57 per cent owned by Kingborad Chemical, had signed a memorandum of understanding with Yingde city government on the purchase.
Kingboard Copper planned to raise 200 million yuan internally to fund the purchase. The remaining 500 million yuan would be raised through a yuan-denominated syndicated loan.
Annual interest on the loan was expected to be below 5.3 per cent, Mr Cheung said.
The 72Mw power plant is about 80 per cent controlled by Yingde city government.
Half its capacity goes to Kingboard Copper Foil's factories in Qingyuan near Yingde, which manufacture copper foil - a key material for making laminates.
